Benefits of Credit Cards

This article will provide you a crisp idea, "why you should have a credit card". A credit card, typically issued by a financial institution like a bank, is a plastic card enabling the cardholder to borrow funds for purchases or services. It serves as a widely used and convenient payment method, extending a line of credit to the user. When utilizing a credit card for a transaction, one essentially borrows money from the card issuer and is obligated to repay the borrowed amount within a specified period, usually on a monthly basis.

Key characteristics of credit cards encompass:

Credit Limit: The maximum amount that can be borrowed using the credit card, determined by the card issuer based on factors like creditworthiness, income, and financial considerations. You can also modify, increase or decrease your limit any time within the permissible limit provided by the service provider.

Interest Rates: If the full balance is not paid by the due date, the remaining amount accrues interest. Credit cards often feature variable interest rates, which may be relatively high compared to other credit forms. One major point here is that the in case of non-payment the interest charged is immensely high and charged on per day basis. 

Grace Period: Many credit cards provide a grace period, typically spanning from 21 to 25 days after the billing cycle ends, during which the borrowed amount can be repaid without incurring interest charges.

Fees: Various fees, including annual fees, late payment fees, and cash advance fees, may be associated with credit cards. Awareness of these fees and card terms is crucial. Read the charges schedule attached with the card carefully. 

Rewards and Benefits: Some credit cards offer rewards programs, cashback, or perks such as travel rewards, discounts, or redeemable points for merchandise and services. You can book flights, travel tickets, hotels. With redeemable points you can also shop or convert them in cash (in specific facilitator case like HDFC).  

Security Features: Credit cards commonly include security features like fraud protection, zero-liability policies, and the ability to dispute unauthorized transactions.

It is imperative for cardholders to use credit cards responsibly, managing expenditures within their means, and ensuring timely bill payments to avoid accumulating debt and facing high-interest charges.

Advantages of Credit cards

Advantages of Credit Card Bifurcation

Credit cards provide several advantages when used responsibly, including:

Convenience: Offering a hassle-free way to make purchases without the need for large amounts of cash, credit cards are widely accepted globally, facilitating online shopping and travel.

Building Credit History: Responsible credit card use, such as timely payments, contributes positively to one's credit history, essential for favorable terms on loans and mortgages.

Building Credit score: Use of credit card helps you to build your credit score and enhance your Credit rating, CIBIL score. Which helps to get better future finances at economic rates. To understand  better go my specific blog Taxolawgy With Priyanka Tiwari: Credit Score

Emergency Fund: Serving as a financial safety net during unforeseen expenses, credit cards offer quick access to funds in times of need.

Rewards and Perks: Many credit cards feature rewards programs, providing benefits like cashback, travel rewards, and various perks, enhancing the overall cardholder experience.

Security Features: With fraud protection, zero-liability policies, and dispute mechanisms, credit cards offer security layers for transactions.

Grace Period: The grace period allows interest-free use of the credit card if the balance is paid in full each month.

Building Financial Discipline: Managing a credit card entails budgeting, timely payments, and understanding credit terms, fostering responsible financial habits.

Travel Benefits: Certain credit cards offer travel-related advantages, including insurance, rental car coverage, and airport lounge access, enhancing the travel experience. People mostly enjoy the lounge access at airports the most.  

It's crucial to recognize that while credit cards offer numerous benefits, responsible use is essential to avoid accumulating debt and negatively impacting one's credit score through actions such as maintaining a high balance or missing payments.

Relevant blogs : 

Introduction to Mutual Funds : Taxolawgy With Priyanka Tiwari: Introduction to Mutual Funds

How to improve your CIBIL or Credit score : Taxolawgy With Priyanka Tiwari: How to improve your CIBIL or Credit score

How to improve your CIBIL or Credit score

 

How to improve your CIBIL or Credit score

Business and personal needs drive a person to reach out for a loan. But getting loan is not an easy task as it seems. You need to have a good credit rating for getting a loan apart from your financial stability. The biggest fact about this lending industry, which I have learned in all these years of my experience. Is that loan is not provided to the needy, it is provided to the greedy. One who has the capability to repay it. Apart from your financial papers, net worth calculation, income proof, CMA and income source, the think which plays a crucial role in the sanction and approval of your loan is your “CREDIT SCORE”.

You must have seen or evident many occasions where you come across the testing of your Credit Score like, “Get your Credit Score” or “Test your Credit Score”. Many of you must have got your loan application rejected or declined due to poor credit score. Now the biggest question which is right now popping in your mind is, “what is the Credit Score”, “Why is it so important for loan approval” and “how to improve it” etc.

Credit Score or CIBIL

Credit Score is the rating provided by a credit bureau which denoted your credit worthiness and potential to repay the loan or debt. It provides the estimate to the bank or financial institution about your capability to repay their loans. It’s a three digit score. It ranges from 300 to 900. The higher your score is, the better your rating and chances to get the loan sanctioned. In India mostly credit score is been addressed as CIBIL or CIBIL Score which is not official correct but due to daily practices it’s apparently considered correct. In India there are four concerns or in correct words, bureaus authorized by RBI (Reserve Bank of India) to provide credit score. Credit Information Bureau (India) Limited [CIBIL] is one of the most preferred credit bureau that is the reason why credit score in India is referred as CIBIL Score or CIBIL.

Credit score is only for individuals or persons. For others like company, firm, business entity and even including individuals the credit analysis is called as credit rating.

Anybody can check their credit score from various websites available.

Importance & Benefits of Credit Score

A good Credit Score provides many privileges and benefits to an individual. Every finance seeker desires to have a high Credit Score. A credit score above 700-750 is considered good score. The importance and benefits of high credit score are :-

1. Easy loan sanction – the people with good credit score gets the loan sanctioned easily. The loan sanction process starts with the checking of credit score. A person with good credit score has the higher chances of getting the loan application approved and loan sanctioned. A bad credit scope gets the loan application rejected right at the face.

2. Get low interest rates – the person with good credit rating may get competitively low interest rate as the banks and financial institutions try to capture the prospective client. A person with good credit rating has a high negotiating power to negotiate and lower their interest charging rates.

3. Charges waiver or decrease – the person with good credit rating may get financial charges and other charges waiver or decrease which results in financial cost saving in complete life cycle of loan. Even such category of persons may also negotiate with the bank or financial institution to waive their charges.

4. Lower processing Fee – the person with good credit rating may lower or decrease the processing fee over their loan after negotiation.

5. Higher and more rewards – In case of credit card, the person with better credit rating gets more rewards likes cashback, discount, coupons etc.

Credit Rating Issuers

In India, credit rating is provided by four Bureaus authorised by RBI (Reserve Bank of India). We will not go in detail about these Bureaus.

1.    Credit Information Bureau (India) Limited (CIBIL)

2.    Equifax

3.    Experian

4.    CRIF High Mark

How to improve Credit Rating

This is the most crucial part to discuss. With the help of this knowledge anybody can improve their credit rating. The following will help to improve your credit rating:-

1. Use credit card regularly – If you have credit card use it regularly. If credit card is not used properly then the credit rating is affected as it shows low financial needs and utilisation.

Here is a trick to show your credit card limit usage. If you are not using credit card for shopping or other lucrative purchases, pay your routine bills by your credit cards and get its usage reflection in records.

2. Pay you loans and credits before due date – Pay your loans and credit cards dues a little before their due dates. It reflects the healthy money flow. And holding the payment till the last date degrades your credit track record.

3. Don’t check score frequently – Mostly it is recommended to check your credit score frequently but I have seen in the past that individuals with poor credit score use to frequently check there credit score and it resulted in further decreasing their credit score. So if your credit rating is low don’t check it very frequently. First build a little sound investment record and then check at least after 6-8 months. For better results try to file a good income tax return in the mean while time (between this 6-8 months gap).

4. Diversify your investment portfolio – As now a day’s your investments accounts are linked with Aadhar, your investment details are available at a common pool for access to authorised authorities like credit bureaus. People with diversify investment portfolio have better credit scores always. So just won’t keep your investments in fixed deposits or saving accounts but diversify. Purchase shares, securities, bonds, mutual funds other than just solid assets like real estate. 

Here is a way to easily improve your credit score. This is from my personal experience, I have tried this on my clients and it does provide a positive result. If are very conservative towards your investment plans, just go for this plan to improve your credit score. Create few FDs’ (Fixed Deposits) with a maturity period of 2 years or more and few RDs’ (Recurring Deposits) with a maturity period of 1 year more. These investments should show a composition of 20%-30% of your annual earning at least.  Wait for 6-8 months and then check credit score. The reason behind this is that your asset base or in other words your net worth reflects your good financial health and credit worthiness. So the credit score improves. 

5. Regular Income Tax Return filing – Income Tax Return is the source of financial record for every authority like  Income Tax and credit rating bureaus. The financial records are traced by these bureaus from the income tax returns filed by you. People with no income tax return filing record mostly have poor credit rating.

6. Longevity of Credit life – People with sound and long credit life record like running term loans in the past and timely payments, have better credit score. Take your credit usage and repayment seriously. And if you are not getting long term loan funds then try to get short term small credits for your various usages which will start building your credit usage track record.

7. Avoid defaults – Bank and financial institutions stay away from defaulters. Yes it is obvious that no one knowingly does any default but many times our ill-planned financial cycle or calendar invites payment default. Always run with cover transaction to ensure fund availability for loan payment on due date.

8. Get a credit card – Yes it is correct. Your credit card can help you to get a good credit score. So if you won’t have a credit card get one soon. As it is evident that people with credit card and its good track record have good credit worthiness.

9. Balanced Credit Mix – It is important to even diversify and maintain your credit portfolio. Have a balanced loan structure which reflect an appropriate usage and finance cost maintenance (interest and charges). Use long term funds for long term usage and short term for short term usage. Use specialized fund for specific purpose, like home loan for housing finance etc. All this builds a good credit score.

 

Do’s and Don’ts

In case of building an attractive Credit score. You should :-

Do’s

- Have a credit card.

- File income tax return regularly.

- Diversify your Investment and loan (Credit) profile.

- Keep Loan defaults at bay.

- Check your credit score atleast once in every Six Month.

Don’ts

- Avoid late payment of loan installments.

- In case of default, negotiate with your lender to have an out of court settlement & avoid to be listed in defaulters list.

- Don’ts associate yourself in joint loans with financially unsound individuals and entities.

- Avoid providing guarantee for financially unsound individuals and entities.

- Avoid getting to many loans.

Here is my best try to provide you the information about credit score and ways to improve it from my experience and knowledge. Friends I‘am putting my strongest efforts to provide you all the details in simplest language, please show your support and follow my blog. Do share with your friends and family to spread the knowledge.

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Disclaimer :

The above blog is purely for educational and  guidance purpose. It's just the reflection of the author's personal experience and judgment. The author has just provided the general information & understanding and its not at all an alternative of any legal advice or practitioner. The content stated in the blog should be used by the reader at his own discretion and sole responsibility. The content of the blog can be only used for any other document, write-up, article, blog and any written or printed material whether on paper or digitally in any form, with the prior permission of the author.  

Introduction to Mutual Funds

Introduction to Mutual Funds

Mutual fund is a hot topic always for people, but due to lucrative returns in the pandemic now everyone wants to understand it. “Mutual funds are subjected to market risk” this phrase surmounts our mind when we think of mutual funds. The reverberance of risk associated with mutual funds acts as a hurdle for investor to take the first step towards Mutual fund investments.  This risk factor over-shadows the benefits in lime light. With this blog I’am putting an effort to explain you what is mutual fund in simple language. I will explain you the benefits and cons of mutual funds and types of mutual fund. Here is the simplest guide to mutual funds. So let’s start learning.

What is Mutual Fund ?

Mutual means shared by two or more people. Fund stands for money collected. Mutual Fund is a pool of investment created by the mutual fund trust to be used for investing further in securities, bonds and debts etc. This investment is managed by experienced fund managers for getting maximum benefits in the form of incomes. This benefit or income from the fund, so invested by the Assets Management Company are distributed among the investors in the form of returns.

Why to go for Mutual Funds ?

We do investment in different assets & securities. Investment provides us an additional income and future security. Everyone tries to diversify their investment portfolio which involves investing in securities, shares, bonds and debentures. But if one wants to invest in securities, bonds and debts, they need to do lots of research to avoid loss and have desired returns. This involves a lot of skills and knowledge as well as time to time monitoring is necessary to avoid any uncertainty. Mutual fund Company does the same think on your behalf from the fund invested by you and others. As mutual funds are managed by experts you can relax and concentrate on your work and your funds will keep earning.

Terminologies

In order to understand Mutual Funds better lets understand the few terminologies and abbreviations most used in the mutual funds operation and mechanism.

1.   Sponsors – Mutual fund is formed in the form of Trust, established by Sponsors. Sponsors are like regulators of mutual funds. They appoint AMC for the management of Mutual Funds. The very well recognised mutual fund trust is UTI (Unit Trust of India). There may be one sponsor or one sponsor along with other corporates to form a mutual fund trust.

2.    AMC – Assets Management Company. This company manages the investment of the investor and invest this fund money in securities and bonds. Mutual fund is been formed by sponsors and they hire AMC’s to handle the investment of investors.  AMC do all the work to management the mutual fund like investment, marketing, accounting and other functions. They charge fees for their service from the investors. Example of AMC are SBI Mutual Fund, HDFC Mutual Fund.

3.    AUM – Asset under management. It is the total asset which the AMC manage for the mutual fund. The value of the securities, debts and bonds less the liabilities of the mutual fund is its AUM. 

4.    Fund Manager -  AMC allocated proper fund manager for a particular mutual fund to manage and plan its investment and evaluate its performance. Fund manger is the proper person who manages the portfolio of mutual fund scheme. For example – Mr. Prashant Jain is the Fund Manager of HDFC Balanced Advantage Fund.

5.   NAV – Net asset value. It is the market value of the securities held by the AMC under the respective scheme of mutual fund. It varies on day to day basis as the market fluctuates. But the NAV is same for a scheme throughout the day, as it is valued at the end of the trading day. For example HDFC Balanced Advantage Fund - Growth Plan - Direct Plan : NAV on 09/11/2021 : ₹ 303.8310.

Benefits of mutual funds

There are varies benefits of mutual funds. This is the reason now a days it the prime choice of investors.

1.   Professionally managed – Mutual funds are managed by fund managers. Fund managers are expert in their work and this provides the expert level performances to the mutual fund. Investor doesn’t have to personally get involved in the investment decisions.

2.  Tax Saving – ELSS (Equity linked saving scheme) is the type of mutual fund type which qualify for deduction under Sec. 80C of the Income Tax Act. Will discuss this in detail below.

3.   Liquidity – Mutual provides you easy entry and exit options. There are open end schemes which provide high liquidity.

4.   Generating Income & High Returns - Mutual fund can be used for a generating passive or additional income. Mutual may provide high returns as when the stock market is high the returns on mutual funds are high. Diversification – Investor can diversify his investment portfolio by investing in mutual funds. In place of personally investing in different assets or securities one can invest in mutual fund which has various securities in its scheme structure. Diversification helps to achieve a balanced investment and safe returns in future.

5.    Time Saving – A person can concentrate on his main business or profession and side by side invest in mutual funds to get an additional income as Mutual funds are managed by Fund Managers.

6.    Easy Accessibility – Now one can very easily invest in mutual funds either directly or through a distributor or discount agent.

If one has its advantage then will have disadvantage as well. Here are the disadvantages or some of the cons of mutual funds.

1. Greed - Mutual Funds are managed by people only and people have a psychological factor of greed. Mutual fund managers tries to get maximum investment from investors because in return of that investment they get fees. Sometimes they even compromise on the level of fund performance to get maximum investment for earning more fees. They do extra manipulative advertisement to entice investors.

2. Risk – “Mutual Funds are subjected to risk”. As they are based on share market securities and share market is volatile. The market goes up and down, the mutual fund returns also go up and down.

3. Investors sentimental effect - Share market is volatile. Its goes up and down from time to time. Many a times a down fall in Share market spread fear in investors and they start withdrawing from the mutual fund their Investments. This in turn makes the fund manager to withdraw or sale the investment of the Mutual fund. This lowers the value of mutual fund as a result the NAV of the mutual fund decreases.

Types of Mutual Funds

There are various types of mutual funds. They are categorised in four broad categories. 

I. Mutual fund based on fund scheme

II. Mutual fund based on investment objective

III. Based on asset invested

IV. Special funds


I. Mutual fund based on fund scheme.

There are basically two types of mutual funds based on fund scheme :-

(a) Close ended scheme

(b) Open ended scheme


(a) Close ended scheme

In this mutual fund scheme the maturity period of the mutual fund scheme is fixed. There is a well defined initial issue period within which you can purchase the units of the scheme. Once the issue period is closed, only the already issued units can be purchased or sold. Example - Reliance Close Ended Equity Fund - Series A – Growth, etc.

(b) Open ended scheme

In this mutual fund scheme the maturity period is not define. You can purchase the units of mutual funds at any time and sell it at any time. These are highly liquid Mutual Fund schemes. Example - SBI Small Cap Fund, etc.

II. Mutual fund based on investment objective

Every investor has a different investment objective; this mutual fund is based on the objective of the investor. Some investors want more growth on the other hand some investors want fixed income. There are basically of three types :-

(a) Growth funds

(b) Fixed income fund

(c) Balanced fund

(a) Growth funds

These scheme basically target long term growth. They are meant for long term investment. They are highly risk prone because they invest more and more on equities and market securities. Example – Axis Growth Opportunities Fund, etc.

(b) Fixed income fund

These mutual fund schemes provide regular returns for a period of time. They won't provide high returns as they have low risk. Example - Mirae Asset Short Term Fund, etc.

(C)Balanced fund

These mutual fund schemes provide your balance between risk and return. They provide a combination in there investment portfolio of equity and debt to get a stable income. The risk is lower as compared to growth funds but higher as compared to fix income funds. Example - DSP Equity & Bond Fund, etc.

III. Based on asset invested

Here the mutual funds are categorised on the basis of the securities in which they invest. Based on asset invested by mutual fund scheme there are three types of mutual funds :-

(a) Equity fund

(b) Debt fund

(c) Hybrid funds

(a) Equity fund

These funds majorly invest in stock or equities of companies. They can invest in Large cap, Mid Cap or small cap companies. They also invest in bluechip companies as well. They have high risk and provide high return. Example - Axis Small Cap Fund, etc. 

(b) Debt fund

These funds invest in debt market security. They provide Low Returns as compared to equity fund. They usually invest in government securities like Government Bonds, debentures, other government securities. Example - Axis Gilt Fund, etc.

(C) Hybrid funds

These Mutual Funds invest in both equity and debt. They create a combination of equity and debt, in some scheme debt portion is more as compared to equity and in some scheme equity portion is more. They are also called balanced fund. They are more risky then debt funds and less risky than equity funds. In the same way they provide more returns as compared to debt funds and less returns as compared to equity funds. Example - Axis Triple Advantage Fund, etc.

III. Special funds

These fund scheme invest in special kinds of asset as per the investment plan or purpose of the Mutual Fund scheme. They can be categorised in four types :-

(a) Index funds

(b) Sectoral funds

(c) Regional Funds

(d) Tax Saving Funds


(a)Index scheme

Index are market benchmark like Nifty 50 or Sensex. Index scheme invest in index stock. They are highly risky. Example - Tata Index Fund Sensex Direct Plan, etc.

(b) Sectoral funds

These mutual funds invest in specific sectors or industrial sector. Like some mutual funds invest in infrastructural companies and some in IT companies etc. Nippon India Pharma fund Direct Growth is a sectoral fund which invest in pharma companies etc.

(c) Regional funds

These mutual funds invest in specific geographical area. They basically invest in companies working or planning to start working in specific geographical area. These funds are mostly popular and operating in foreign countries. Example – Matthews Korea Fund, etc.

(d) Tax Saving Funds

These mutual funds investment are eligible for tax deduction under Section 80 C of the Income Tax Act. In these mutual funds scheme there is a lock in period which starts from three years. These are the most adored mutual fund scheme in India. ELSS (Equity linked saving scheme) are the tax saving funds. Example – JM Tax Gain Fund, etc.

I tried my best to explain you all about mutual funds. This is just the introduction and I will be coming up with specific blogs over it to share with you further details. If you have any comments and queries, feel free to share over the comment box below. The mutual funds mentioned above are just for education purpose and they are not in any manner a advice or recommendation.

Take care and god bless you all.

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Disclaimer :

The above blog is purely for educational and  guidance purpose. It's just the reflection of the author's personal experience and judgment. The author has just provided the general information & understanding and its not at all an alternative of any legal advice or practitioner. The content stated in the blog should be used by the reader at his own discretion and sole responsibility. The content of the blog can be only used for any other document, write-up, article, blog and any written or printed material whether on paper or digitally in any form, with the prior permission of the author.  

Flipkart Pay later - benefits, uses and activation

 

Flipkart Pay later : benefits, uses and activation process

Managing finances is a day to day activity now a day. As the inflation is rising worldwide, people are looking for alternative ways to plan their monthly bill payments. There is limit in everyone’s purchasing power but certain unalarmed needs knock everyone’s door now and then.

Diwali is at its arrival and we are all geared with our shopping list. Diwali is the biggest festival in India. Festival season is something which add lots of gifts to our shopping basket always and deep down in our minds everyone wants festivals to be full of gifts, sweets, new cloths and latest products. But the question is, “How to get the extra money to pay” or "Loan & credit to pay".

Look honestly not all of us have any access to any credit facility like short term loans, credit cards etc. And no want to bear the exhausting, complicated, time taking process of loan approval. Loan approval in itself requires a lot of paper work which is not a cup of tea for a common person like a student or a homemaker. In addition to this, short term loans and credit facilities (like Credit Cards) require paying charges and interests on regular basis.

So here I’am with an easy solution for all these issues. We are all now very much familiar with online shopping and e-commerce platforms. So why not to use these platform facilities to plan our finances. Flipkart  is out with a very useful feature of “Flipkart Pay Later”. Its quite old now but still, people are not much aware of it and its benefits.

Flipkart Pay later

Flipkart Pay Later is a kind of credit facility or loan facility offered by flipkart in association with IDFC First Bank, in which you can pay after the purchase of your product. The payment system is basically of two different types i.e. single payment in the subsequent month (Pay Next Month) or EMI payment. Flipkart Pay Later (EMI) is currently available for select products where transaction amount is greater than ₹ 2,500.

This facility can also be used with their partner platforms such as Myntra and 2GUD. Flipkart Pay Later (EMI) is not available on their partner platforms. But my main emphases is over  Pay Next Month because it does not charge any interest.

No interest, hidden Charges and processing fee

The best think about Flipkart Pay Later in that it won’t charge you any processing fee and interest for the facility. Flipkart Pay Later (EMI) does incorporate interest element in its EMI (every month installment) but in Pay Next Month there is no interest charged. There is a nominal usage fee of ₹10/- will be added to the customer’s dues if the credit usage for the month is higher than ₹1,000/-.

Benefits

1. Instant credit upto ₹ 70,000.
2. Few minutes application processing time.
3. No documentation i.e. e-KYC ( Electronic Know Your Customer)
4. Credit for a month without any charge (except ₹ 10) like annual maintenances, service charge, interest charge etc.
5. Affordable EMI without any loan approval or credit approval process.
6. Easy adjustment of refunds on cancellations from dues payable.
7. One bill payment of all purchases made last month or previous months. So individual record keeping.
8. Any time cancellation or surrender of the facility after payment of all dues.
9. 24*7 customer support.

Penalty

We talked about all the pros, now is the point to discuss the cons. As it is a financial credit or loan so conclusively in case of default, there will some penalty too. Penalty will be charges if you defaulted to pay or failed to pay the due amount or minimum amount due (partial payment). Penalty will be calculated on the outstanding dues (includes outstanding principal amount, interest or late payment panality) as on 5th of each month.

Bill Amount (in ₹)                     Late Payment Charge Amount (in ₹) 

100-500                                                60    

501-1000                                            125    

1001-2000                                          175

2001-4000                                          300

4001-5000                                          410

5000 & Above                                     600

Minimum amount due is the sum total of "10% of your Pay Later purchases" plus "Convenience fee for the partial payment option" plus "Any rolled over (or unpaid) amount from the previous month(s)" plus "Any late payment charges from the previous month(s)".

Convenience fee is calculated on the amount you carry forward to the next month.

Carry Forward amount to next month	Convenience Fee for Partial Payment	Late Payment Charges for payments after the due date
<= ₹ 500	₹ 60	₹ 60
₹ 501 - ₹ 1000	₹ 60	₹ 125
₹ 1001 - ₹ 2000	₹ 120	₹ 175
₹ 2001 - ₹ 4000	₹ 240	₹ 300
₹ 4001 - ₹ 5000	₹ 330	₹ 410
₹ 5000 & above	₹ 475	₹ 600

Note : all charges are inclusive of all taxes

How to Avail and due payments

One can activate Flipkart Pay Later by Aadhaar OTP-based e-KYC (Electronic Know your client) which is valid only for 12 months from the date of activating your Pay Later account.

For this you have of to visit the Flipkart Pay Later section under 'My Account' and refer to the ‘Pay Later’ section in the Flipkart mobile Application or website.

The due payments are to be done by the 5th of the subsequent month(s).

How to activate

It is a three stage process. First stage is the Pan Activation. Second stage is the Aadhaar OTP-based e-KYC. Last stage is the Bank confirmation.

Step 1 : In the Flipkart App or website. Login and go to Pay Later section under 'My Account'  or simply you can search Flipkart Pay Later over the search bar provided in the Flipkart App or website.

Step 2 : Enter your PAN (Permanent Account No). Click on “Activate Now” button.

Step 3 : Verify Aadhaar : Fill in your Aadhaar no and verify by the OTP received in the registered mobile with Aadhaar. Click on “Verify” button.

Step 4 : Fill in the OTP (one time password) in the pop up dialogue box.

Step 5 : Review and submit your application. Check your details, name, address etc.

Step 6 : Verify your Bank account by filing your UPI Id or Bank Details. Click on “Confirm and Submit” button.

Step 7 : Rupee one will be credited in your bank account linked with Aadhaar.

Step 8 : Your eligibility will be checked.

Step 9 : Now your will be informed about your credit limit for Flipkart Pay later (Pay Next Month).

There is also a offer on the first purchase by using Flipkart Pay Later, you can get 15% off subject to the maximum of ₹150/-.

If you want to see the complete process, then you can visit the my youtube link : https://youtu.be/FxYMP4onRek

For Flipkart Pay Later (EMI) your have to check on individual product eligible for it and then proceed. For more details you can visit Flipkart official website and mobile application. I hope this blog helps you out to finance your Diwali shopping plans. I tried best to provide you the best information.

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Disclaimer :

The above blog is purely for educational and  guidance purpose. It's just the reflection of the author's personal experience and judgment. The author has just provided the general information & understanding and its not at all an alternative of any legal advice or practitioner. The content stated in the blog should be used by the reader at his own discretion and sole responsibility. The content of the blog can be only used for any other document, write-up, article, blog and any written or printed material whether on paper or digitally in any form, with the prior permission of the author.